Composite solder is a promising route to improve the properties and reliability of Sn-based lead-free solder. In this study, Cu-coated graphene nanosheets (Cu-GNSs) were synthesized using pyrolysis. Cu-GNSs reinforced Sn2.5Ag0.7Cu0.1RE composite lead-free solders were prepared via powder metallurgy. The size, distribution, and adsorption type of Cu nanoparticles on the GNSs were studied. The relation of the Cu-GNSs content and microstructure to the physical, wettability, and mechanical properties of composite solders was discussed. The results show that Cu nanoparticles (with a mean size of 13 nm) present uniform distribution and effective chemisorptions on the GNS. Microstructural evolution of composite solders is dependent on the addition of Cu-GNSs. With increasing Cu-GNSs addition, β-Sn grains become finer and the eutectic phase proportion becomes larger, while the morphology of the eutectic phase transforms from dispersion to network-type. The improvement of the tensile strength of the composite solder can be attributed to grain refinement and load transfer. While the existence of Cu-GNSs can effectively improve the wettability and slightly change the melting point, it can also lead to the decline of elongation and electrical conductivity of the composite solder.